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Getting Smart Grid Customers Plugged In

CIOs of electric utilities can help drive smart grid adoption by spearheading a new approach to customer engagement powered by analytics, social media, and mobile technologies.

It has been well over a century since Nikola Tesla’s AC beat out Thomas Edison’s DC to become the U.S. standard for power distribution. With the “war of currents” settled, the industry set out to build the power grid. The traditional grid operated like a one-way street—the electric utility generated power and delivered it to customers over transmission and distribution lines. In fact, it’s likely that Tesla would recognize today’s grid as very familiar to what was envisioned a century ago. In the past decade, however, this familiar and mainly comfortable relationship between utilities and their customers has been disrupted by the introduction of the smart grid.

The smart grid deploys digital technology to enable two-way communications between a utility and its customers. Controls, computers, automation, and new technologies and equipment along transmission and distribution lines provide the utility with information about demand and allow it to fine-tune the amount of power delivered. Technologies such as smart meters offer customers real-time data on usage and costs, creating new opportunities to manage consumption.

Because the smart grid is a two-way street, customers play an essential role in capturing the full potential of this technological revolution. But many utilities are struggling to effectively engage with customers on smart grid’s uses and benefits. A recent survey indicates that a lack of customer interest and knowledge is among the greatest obstacles to smart grid implementation.¹ Some customers have actively opposed efforts to install smart meters, enlisting major consumer groups to their cause. Their motivations range from concerns over higher costs and loss of privacy to health fears relating to radio frequency radiation. In some cities, they have literally taken to the streets to demand a moratorium on smart meter installation,² and forced some utilities to develop “opt-out” programs.³

To make their investments in smart grid pay off, utilities will need a new strategic approach to customer engagement. Analytics, social media, and mobile technologies can be essential elements of this new approach—meaning CIOs and their technology organizations will be important players in tackling the challenge of smart grid adoption.

Motivating Adoption through Customer Engagement

Before devising new engagement strategies, utilities need to better understand their customers. By using advanced analytics and social media “data scraping” (monitoring and extracting meaningful data from social media outlets for analysis), utilities can benchmark and analyze customer activities, awareness, and perception. In order to achieve this vision, CIOs will need to rigorously manage the development and/or enhancement of an architecture supporting these capabilities. Once available, this information will allow utilities to segment their customers on the basis of differentiating characteristics, such as attitudes toward smart grid adoption, socioeconomic considerations, energy consumption rates, and political leanings. Utilities can then apply the resulting insights to determine which messages, social media, and mobile tools to use to tailor engagement with each customer segment.

Leading companies will provide customers with a sophisticated level of service via one or more social media platforms. That may entail providing service outage notifications via Twitter, or integrating a smart grid app into Facebook that allows customers to compare their energy use and share tips on energy efficiency.4

Leading companies will also integrate mobile technology with their smart metering infrastructure. This will allow them to provide personalized, real-time reports to customers on their energy use, as well as suggestions for how to change consumption patterns to take advantage of lower usage charges at certain times of day. In short, analytics-driven customer engagement enables utilities to answer some of customers’ pressing questions: “What is smart grid?” and “What does it mean for me?”

The Journey to Customer Engagement Maturity

By delivering targeted messages through social and mobile channels, utilities may enhance their ability to garner customers’ attention, instill a sense of commitment and ownership, and influence behaviors. Helping customers through the adoption process will be essential to transforming resistance to smart grid into commitment (see Figure 1).

Figure 1: The Path to Customer Engagement Maturity

Deloitte Consulting LLP

CIOs and their organizations will be tasked with developing the supporting infrastructure architecture as the enabling platform for these engagement channels. To get started on the journey to customer engagement maturity, utilities should focus on three core activities:

Assess current communications and perception. Utilities need to determine their starting point. By using tools such as customer segmentation analysis, social media analytics, and an awareness assessment based on benchmarks, they can identify the concerns of each segment, as well as appropriate vehicles for engaging different customer groups.

Develop engagement strategies. Utilities should apply the assessment’s findingsto develop social and mobile engagement strategies for each customer segment. A social media strategy should seek to educate customers regarding energy usage as well as communicate the benefits of smart grid. Utilities should also collaborate with organizations that have a social media following to deliver positive messages about smart grid to the public. A mobile technology strategy should seek to provide customers with reliable information on services and bills, up-to-date information on individual usage, real-time outage alerts, and energy efficiency solutions.

Identify channels for implementing the strategies. Utilities need to identify appropriate communication channels for getting their message to customers and other stakeholders. One effective approach is to use social media to develop a network of “change agents” in the community. These individuals can help the utility in its efforts to educate consumers, as well as disseminate a positive message regarding smart grid to counteract any negative sentiment in the community.

About Deloitte Insights

Deloitte Insights for CIOs couples broad business insights with deep technical knowledge to help executives drive business and technology strategy, support business transformation, and enhance growth and productivity. Through fact-based research, technology perspectives and analyses, case studies and more, Deloitte Insights for CIOs informs the essential conversations in global, technology-led organizations. Learn more.

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